David Cameron claimed to be protecting British business and, especially, the City when he wielded his veto at the EU summit on Friday. You might, then, have expected him to return home to a rapturous welcome from bankers and business leaders. But he didn’t. There was no applause, just a bewildered silence. Eventually a few of the usual suspects came out and backed him but most business leaders were uneasy, to say the least. WPP boss Martin Sorrell, no fan of high taxes and business regulation, criticised the veto and the CBI, after saying nothing for days, issued a lukewarm and barely reported statement complaining about the potential damage from the political row. Even the IoD, whom you might have expected to shout ‘Go Dave Go’, limited itself to a grumpy prediction that the Euro is doomed.
The silence was deafening and there was a good reason. There was nothing on the table on Thursday night which posed a direct threat to British business or the City. The row centred on two pieces of paper. The badly worded and barely comprehensible fiscal compact was surpassed in vagueness and gobbledygook only by the British government’s attempt to amend it. In most organisations, if took something of this quality to your weekly departmental briefing, let alone to a board meeting, you’d be told to piss off and do it properly. Perhaps different standards apply in EU summits.
However badly worded, though, the fiscal compact only bound the countries of the Eurozone and, by extension, those preparing to join the single currency. The dreaded Financial Transaction Tax was not even discussed. As a tax measure, the UK has a veto over the FTT and would still have had a veto had the fiscal compact been passed in its original form. If David Cameron didn’t like the proposed treaty, and there are a lot of reasons not to, he didn’t have to use a veto. He could have done what the Swedes, Czechs and Hungarians did and just said, ‘We’ll think about it’. The agreement, such as it is, is still vague at this stage and may even fall apart of its own accord.
Using a veto in an EU summit is seen by many as a ‘nuclear option’ – it’s the diplomatic equivalent of walking out of a meeting and telling everyone to “f**k off”. It might make you feel good at the time but even those who agree with you will think your behaviour boorish and crass. In consensus driven organisations it sometimes helps if people shake things up a bit by being confrontational but they need to pick their moments. The moment to excercise a veto will be when a proposal for the FTT is being voted on, or when all these other terrible restrictions that the government claims are ‘in the pipeline’ are brought to the table as clear directives. Using a veto against a vague non-treaty which didn’t even commit Britain to anything was pointless.
If you hit a brick wall with a sledgehammer, it collapses. If you hit thin air with a sledgehammer you just get a vague whooshing sound and you look a bit silly. A collapsing brick wall, like, say, the defeat of a financial transaction tax, would win applause. Whacking the thin air of a vague Euro agreement just leaves people wondering what that strange bloke is doing wielding his hammer at nothing.